The Philippines is for sale?! Options

[maharlikangpilip...]

http://www.bulatlat.com/main/2010/11/19/ne...s-not-for-sale/

what shall happen to our country?

[juansuing]

http://www.bulatlat.com/main/2010/11/19/ne...s-not-for-sale/

what shall happen to our country?

I bet these people don't know the importance of these PPPs to the economy and how many jobs these can create. Sigh.

[trismegistos]

PPP is just a rebranded BOT like those patterned from the time of Gloria and Ramos.

To quote Dean de la Paz: The economic managers of Noynoy are vestiges from the Gloria Arroyo’s economic team and under her, its current secretary held the trade and finance portfolios responsible for today’s adverse realities. It was between 2004 and 2005 that the deficit deteriorated into a fiscal crisis virtually killing infrastructure development. Hence, we expect the DOF nominee understands the dearth of investments in baseload energy sources and the critical final-mile linkages in telecommunications infrastructure that afflict conflict and depressed areas. He should also understand why there have been substantial divestments in other critical sectors that impact on economic competitiveness.

Philippines has the highest electricity rates in Asia c/o the neoliberal policies(Privatization, Deregulation, Trade liberalization, Contractualization, Globalization, etc) which started during Cory's time and of course due to the mothballing of the Bataan Nuclear Power Plant.

We are always in the losing end in all of these Sovereign Guarantee contracts like the case in point to Ramos' PPA with IPPs.

Who will invest if the electricity rates is high? Pang call center business na lang cguro. Industrialization will be a fleeting dream. Higher electricity rates would mean relocation of jobs to where it is cheaper. So more jobs you say?

Expect higher toll fees, high MRT rates, higher electricity rates in a one sided contracts that will be freely given by Noy's economic managers.

Baka magising na lang tayo, di na sa atin ang kalye, lahat na lang may toll fee.

Public infrastructures, Public utilities should be under the domain of the Gov't for the public interests and not with the bottomline seeking private interests.

Uutangin din naman ng mga foreign private companies na yan bakit hindi na lang gobyerno na mismo ang umutang at magkusa sa paggawa ng mga daan, power plants at iba pa. Ang problema ay ang mga Deregulations at Privatizations na mga batas na naisapasa ay pumipigil sa gobyerno na gawin ang nararapat. eg EPIRA law and the privatization of Transco and soon of the Napocor, Oil Deregulation and the consequent privatization of Petron, etc...

But in all other sectors except Public infrastructures and utilities, I welcome Foreign Direct Investments.

Philippines for Sale? They want charter change to allow full foreign ownership.

This post has been edited by trismegistos: Nov 20 2010, 08:29 AM

[islander]

You too with that private-public partnership (PPP). Our governor who got elected two years ago by mistake introduced, just like in the Philippines, this private-public partnership (PPP) scam. Private companies are making plenty of money off the island government by getting juicy money making contracts or running certain services for the government. Thing is some of those services were done cheaper by the government. Also, some of the contracts are given to those that have friends in the government even though there contract bid was more expensive.

For example, they were going to fire all public school janitors to save money. Then after some protest they said they would replace them with a private company. Chances are those private companies would charge plenty and only do a couple of hours of clean up at the schools if any.


These private companies involved in PPP only want to get involved in things that make money. If it is a branch of the island government which loses money they do not want anything to do with it. People have been protesting. The island government has been cutting public services and firing thousands of workers since they say there is no money. But then they turn around and hand the peoples money to these private companies who local radio commentators say also give campaign money to certain politicians.

Has for jobs these PPP might create some low income jobs but that is about it. The governor firing all those people has hurt banks and private businesses who relied on government workers spending of there weekly check.

This post has been edited by islander: Nov 20 2010, 08:09 PM

[martin_nuke]

Isn't that the ZTE Scandal is a PPP venture?

[BingBing666]

Philipine must be getting too crowded and too much of a cost. The future is in the mainland SEA not small tiny island in the outskirt of the mainland SEA.

[trismegistos]

PNoy's 'Regulatory Risk' Compensation same as "Sovereign Guarantee"?

http://businessmirror.com.ph/home/opinion/...-in-translation

Lost in translation?
Sunday, 21 November 2010 20:00 J.A. de la Cruz / Coast-to-Coast


IF P. Noy and his economic managers do not watch out, the government’s efforts to accelerate the country’s infrastructure development—woefully lagging behind our Asean neighbors, not to mention China and India over the past decade—may just suffer a big blow all because of a potential misreading of the Chief Executive’s offer of compensation for “regulatory risk.” It was, as they say, lost in translation.

Just what did he really mean when he issued such an assurance? Proof that it was prone to misunderstanding was the seeming inability of his own Cabinet members to fully and responsibly explain what the guarantee (that word) was all about.

All that Finance Secretary Cesar Purisima could say, after P. Noy issued that assurance, was that all the contracts would be studied carefully so there will be no additional burdens on the government. “Whatever are in the terms of the contract are respected,” Purisima explained, “and if we bid this out properly, the chances that it will end up in court will be much less than in the past....If the terms of the contract say that rates should be increased by this time and it’s not allowed, we step in….”

Well, Purisima may be well-meaning and he may be right. But he cannot be all-knowing and his staff all too clean to be passed over, as it were, by a crafty and well-connected contractor. We have all witnessed similar situations before where well-meaning managers get enmeshed in the nitty-gritty of contracts, such as those being proferred under the PPP program that at the end of the day their honest mistakes and/or misjudgments get borne by poor taxpayers and consumers with no choice but to grin and bear it.

In a word, the well-intentioned Finance chief cannot by any measure prevent anybody from questioning the terms of a government contract in court or bring this up for public scrutiny. And if that happens and the government steps in to save face, as it were, and compensate even just for a short period of time that the case remains unresolved, is that not eerily similar to the “sovereign guarantees” or some such “compensatory arrangements” issued in the past?

Even Presidential Spokesman Edwin Lacierda could only offer an inchoate statement, saying “the granting of sovereign guarantee was precisely what the administration was trying to avoid in encouraging investors to come to the Philippines.” But it was PCDSP Secretary Ricky Carandang’s clarification which muddles the entire translation and only served to confirm what most people have feared since the Palace boys started explaining what P. Noy really meant. “A sovereign guarantee,” Carandang intoned, “protects you from market risks and debts while protection from regulatory risks is like an insurance policy. For example, if the investor gets a temporary restraining order from the court because of a petition, the government can shoulder whatever will be lost under a specific contract… until such time that the case is pending, the government will have to pay what the company is supposed to be making… and once the case is resolved we can get back the money….” He further differentiates the two schemes thus: “a sovereign guarantee would entail payment of products or goods such as electricity without the company worrying whether it could sell everything or not…That is totally different because there is no risk involved at all because the company is guaranteed full payment even if the products are not sold. Here, it’s different, if a company loses money, then it loses money…” and proceeded to insist that the protection from regulatory risks would involve the courts, local government units and the Legislature, among others. This argument is not only legally infirm; it is also a clear assault on accountability and the proper use of government funds. As one observer said, these guys are off their rockers and are not serving P. Noy and the Filipino people well.



Do their explanations wash?

In any event, let’s see whether these guys’—especially Carandang’s explanations—wash. Take the case of the South Luzon Expressway or any other tollway. The Supreme Court has decided that the TRB, the government body in charge of regulating our tollways, has the right to decide on the charges to be imposed on those roads. But the court also said it must go through hearings and consultations to arrive at such decisions. Obviously, given those guidelines it is very possible that every increase in the toll will not only be subjected to challenge before the TRB, but can also be elevated for decision to higher bodies, including the Office of the President and eventually the Supreme Court.

It is also very possible that in the course of heated exchanges over such fees the Legislature comes out with a bill which revises the powers and duties of the TRB and provides for a different parameter for the determination and imposition of reasonable fees. In fine, at any given time in the life of its contract, the tollway operator can be subjected to challenge which can drag on for long periods of time. They will therefore be eligible for “regulatory risk” compensation. These may not cover the entire cost or expected revenue from the tollway for any given period. It may not even be called a “sovereign guarantee” or “take-or-pay.” But still it is compensable based on an agreed rate using government funds. And if, by some quirk, the operator decides it is too much of a burden to continue with the project for the entire contract period of, say, 15 or 25 years even if it has only been in place for a year or so, what will prevent it from offering to bail out and asking for full payment using the “regulatory risk” compensation scheme? Nothing will prevent it and if we catch Carandang’s brief, it will be fully compensated. It may not be called such, but as the critics say, this advisory smacks of the much reviled “guarantees” issued by past administrations such as the “take-or-pay” provisions for independent power producers (IPP) and the thrice-revised Metro Rail Transit (MRT) 3 BLT contract under the Ramos government which remains a huge burden to taxpayers up to now.

The same tack will now apply to the rehabilitation and extension of the MRT 3 project which is part of the PPP portfolio. We note that the “operator” of the current MRT 3—the Sobrepeña group—the subject of many unresolved cases—has been reportedly bought by a group headed by PLDT chairman Manny Pangilinan. If the “regulatory risk” formula is applied on this case, it is very possible that government will end up “buying out” the remaining contract fees before it can negotiate and/or bid out the rehabilitation and extension portion. Remember, the MRT 3 BLT contract was not exactly an out and out “sovereign guarantee” scheme but a tricky, maybe even more disadvantageous, version of it. But we are biting the bullet up to now. And by the very nature of the entire enterprise, especially after the Development Bank of the Philippines and LandBank bought out the project bonds for $800 million without getting back the operating rights, it may be argued that the rehabilitation and extension project can very well be accorded a “regulatory risk” standing and open to compensation even before the bidding terms are drawn up. Why so? For the simple reason that no investor in his right mind will start looking into this new phase outside of the original arrangement made by Bob Sobrepeña and his group during the Ramos years. Otherwise, if that is not the starting point, the government will probably have to do the new project on its own and end up like the overpriced Light Rail Transit 1 and 2 system which it now hopes to bid out as part of the PPP plan.

Indeed, if we all want this PPP program to proceed with all deliberate dispatch, P. Noy’s economic managers—never mind his spokesmen—had better come around to cleaning up their act and come out with a definitive and responsible formula to pin down what they have euphemistically called “regulatory risk” compensation scheme. Short of that they should take House Minoity Leader Edcel Lagman’s riposte to heart: “...while it is salutary to protect investors from regulatory risks...we should not be carried away and issue errant advisories....It is heretical for the President to assert that he will defy the Supreme Court decisions annulling or modifying contractual stipulations...even the Legislature does not pass laws that cannot be repealed or modified and consequently, the President cannot prevent Congress from legislating a new law as warranted by changing circumstances.” They may not like Lagman’s advise or even respect his position, but they have to take a second hard look at what he is saying as it carries the weight of experience and the sentiment of a people long suffering from those whose good intentions have gone astray.

[matigasngulo]

who knows, one day the PPP will be privatized appropriately and the guarantee dropped.

so far i have noticed to beat TheBernank, is to think like TheBernank.

This post has been edited by matigasngulo: Nov 22 2010, 10:05 PM

[trismegistos]

our leaders must have testicular fortitude this time to get a better piece of the bargain. we'd been subservient and fooled at for centuries already. with their decaying economies and yet awashed with fiat money, they have no place to go but in emerging markets in SEA to make a killing.

This post has been edited by trismegistos: Nov 23 2010, 03:52 AM

[matigasngulo]

our leaders must have testicular fortitude this time to get a better piece of the bargain. we'd been subservient and fooled at for centuries already. with their decaying economies and yet awashed with fiat money, they have no place to go but in emerging markets in SEA to make a killing.

absurdly the Philippines position as a debtor is under these circumstances a blessing in disguise, the government with a deficit and forced to create more debt (for the NFA perhaps), which is gobbled up by the billion and domestic companies taking the opportunity as well to lend and borrow. with more debt creation, inflation would be kept at bay (at least not to make too much of a good thing like the Japanese did, or combine it with other recklessness like the USA or China). actually forget that bit about government debt creation, the ideal would be the Philippines only borrowing the mininum and just kept on rolling all of its debt into longer maturities or even consols. it works better than any capital controls which wouldn't deter the determined speculator like Soros anyway, as it has been / is being tried by China and other SEA nations.

then it might be auspicious to create the ASEAN bond scheme like Thaksin and Erle proposed, which would soak up the liquidity quite well. Either that or the not staying in subservience bit still has to be worked out with an exit strategy once the flood has passed, but noone can tell when will the printing stop And who knows, maybe Noynoy and his advisers are still holding too many dollar assets

This post has been edited by matigasngulo: Nov 23 2010, 04:07 PM

[trismegistos]

http://www.thepoc.net/blogwatch-features/1...ht-robbery.html

PPP: Daylight robbery
Thursday, 25 November 2010 12:00 AM Jose Carlos L. Maningat


“This is well and truly a celebration. Welcome, all of you, to the Daylight Summit.”

During last week's Infrastructure Philippines 2010 Summit, President Benigno “Noynoy” Aquino III delivered what were perhaps the sweetest assurances to profiteers in recent years. One, that investors in public-private partnerships (PPP) projects will be protected from regulatory risks arising from court orders and decisions. Two, that the government will readily spend its resources to pay the sponsor in case the courts, the legislature and other regulatory bodies get in the way of the private partners' profiteering.

Anyone in his right state of mind will see that such obviously pro-business terms and conditions under PPP do not spell out partnership; it's puppetry. The Palace ties its hands, gives private sponsors the upper hand in fixing user's fees (forget about the so-called formula), and even vows to compensate whatever would be deemed as losses should the courts intervene. No rules, just guarantees. And that is at the expense of the tax-paying public.

Which means that under Aquino's PPP, private contractors are already lottery winners ahead of the raffle draw. How could you be luckier than that?

The proposed scheme gets even more alarming as the Supreme Court (SC) flashes a thumbs-up sign to Aquino's PPP policy. In a report, SC spokesperson Jose Midas Marquez said that the government can continue paying the investor for a disputed contract until the court decides against it. Pay now, nullify the project later. The high court won’t mind if private contractors have already made milking cows out of every Filipino as long as it doesn’t see the project as contrary to public interest.

It can be remembered that when President introduced PPP during his first State of the Nation Address (SONA), he said that the government will not spend a single cent. “Hindi tayo gagastos, kikita pa tayo,” as Aquino boasted in his speech. Yet apparently, it is the government which will shell out the first billions for the PPP projects.

As a come-on, the Palace pledged to raise the seed capital to the tune of P200 billion to supposedly jump-start the PPP projects. The P200 billion capital, which is around 12 percent of the total national budget for next year and 61.5 percent of the projected P325-billion deficit by the yearend, will be pooled under the Philippine Infrastructure Development Fund (PIDF). The catch: it will be sourced from government financial institutions (GFIs) like the Government Service Insurance System (GSIS), Land Bank of the Philippines and the Social Security System (SSS).

In an instant, private contractors will gain access to GSIS and SSS funds and to depositor's money as well, thanks to Aquino's PPP. Through the PIDF, the government essentially puts up a nexus for the transfer of workers' pension and social security funds to private-led infrastructure projects. As to how the P200 billion will be returned to GFIs, that is obviously out of Aquino's concern. It is clear that the only guarantee he set out is on the unhampered profiteering of companies.

Prior to the PPP summit, Aquino had in fact installed a fixed drainage pipe in the country’s coffers that will pump money to private-led projects. When he signed Executive Order 8 which replaced the old Build-Operate-Transfer (BOT) center with the PPP center, he actually made public to private transfer of funds easier. As presented by National Economic and Development Authority (NEDA) Sec. Cayetano Paderanga, Jr. in the PPP summit, the PPP center will “integrate effectively PPP into government’s planning, programming and budgeting processes and policies.”

Such PPP integration into the budgeting process is best represented by the Project Development and Monitoring Facility (PDMF) fund which is at the disposal of the PPP center. Initially, the Aquino administration bankrolled PDMF with P300 million, which is on top of the P12.5-billion allocation in next year’s budget specifically for PPP projects in 2011. All in all, government’s initial counterpart funding for PPP would be at least P212.8 billion.

Expectedly, this amount will be complemented by huge loans to be offered by the same multilateral creditors which attended the PPP summit: World Bank (WB), Asian Development Bank (ADB)), Japan Bank for International Cooperation (JBIC), and the International Finance Corporation (IFC). As WB representative Bert Hofman put it, “the idea is to guarantee the government’s guarantee.” This devious “idea” essentially puts more pressure to the country’s ballooning budget deficit and bodes bigger debt payments by more generations of Filipinos through taxes.

To make investors crave more for PPP, the Monetary Board has recently authorized a separate Single Borrower’s Limit (SBL) of 25% of a bank’s equity for lending specifically to PPP projects. A normal SBL refers to the Central Banks restriction of each bank’s exposure to a single borrower to only 25% of its capital. On the other hand, a separate SBL permits banks to lend as much as 25% of its equity to a project Aquino’s PPP as certified by NEDA. This will apply for three years.

What does this mean? Such scheme will essentially drain more depositor’s money from the banks to bankroll private-led projects. In simple terms, foreign and local investors would not be really using their own money at the end of the day. They will instead maraud the local banks and use the people’s money to make the most out of the separate SBL.

Indeed, when the government bargains this hard – to the extent of blatantly putting the corporation’s profit motive above the public’s interest – capitalist vampires are just too eager to rip everyone's pockets in a thousand creative ways.

Welcome to PPP. Welcome to daylight robbery.